Carlo Rino Group Berhad, a Malaysian fashion retailer specializing in women’s handbags, footwear, and accessories, is transitioning from the LEAP Market to the ACE Market of Bursa Malaysia. Below is a detailed evaluation of the company’s Initial Public Offering (IPO):
1. IPO Details
The IPO application period opened on November 28, 2024, and closed on December 5, 2024. The listing on the ACE Market is scheduled for December 18, 2024.
IPO Placement Amount and Outstanding Shares
The IPO is priced at RM0.27 per share, with a public issue of 171,865,700 new shares. Post-IPO, the company’s market capitalization is expected to be approximately RM270 million. They aim to raise approximately RM46.4 million.The substantial offering size relative to market capitalization suggests a strong capital base, which could support favorable trading dynamics on the first day.
TA Securities Holdings Berhad serves as the principal adviser, sponsor, underwriter, and placement agent for Carlo Rino’s IPO. The involvement of a reputable firm like TA Securities is a positive indicator, potentially enhancing investor confidence and contributing to favorable first-day trading performance.
Carlo Rino designs, promotes, markets, distributes, and retails women’s handbags, footwear, and accessories. Operating through 36 boutiques in shopping malls, five boutiques at premium outlets, 82 departmental store counters, and online platforms, the company has established a significant presence in Malaysia’s fashion retail sector.
For the financial year ended June 30, 2024 (FY2024), Carlo Rino reported a net profit of RM19.31 million. At the IPO price of RM0.27 per share, the company is valued at approximately 14 times its trailing earnings.
Carlo Rino operates 36 boutiques in shopping malls, five boutiques at premium outlets, and consigns products to 82 departmental store counters, in addition to online sales. This diversified retail presence enhances its market reach and brand visibility.
The global handbag market is projected to grow at a compound annual growth rate (CAGR) of 5.4% from 2021 to 2028, driven by increasing consumer spending on fashion accessories and the rise of e-commerce. Regionally, Southeast Asia’s fashion retail sector is experiencing growth, supported by a burgeoning middle class and urbanization.
Malaysia’s GDP growth and consumer spending patterns are pivotal in assessing the economic backdrop. Investors should consider current economic indicators and consumer confidence levels when evaluating the IPO’s prospects.
IPO Allotment Result
The allotment of IPO shares to successful applicants is scheduled for December 16, 2024.
Considering the company’s established market presence, strategic expansion plans, and the positive indicators from institutional participation, subscribing to Carlo Rino’s IPO appears to be a promising opportunity. Given the favorable market conditions and the company’s growth prospects, it is estimated that the stock could trade between RM0.30 to RM0.32 on the first day, reflecting an 11% to 19% premium over the IPO price. The stock is likely to trade mildly above the IPO price, contingent upon overall market sentiment and investor demand.
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